Nobody invests in future savings

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One of the most seductive flaws in modern thinking is that we can persuade people to do something unpleasant today in order to avoid something even more unpleasant in the future. The trouble is, humans are not wired that way. As the “marshmallow experiment” has shown time and again, around 90 percent of us treat our future selves as strangers. This has appalling consequences individually and collectively: A smoker won’t go through the pain of withdrawal so that a stranger doesn’t get lung disease; an alcoholic won’t lay off the booze so that a stranger doesn’t get a hangover; a fat man won’t stay out of the fridge so that a stranger won’t get a heart attack.

Collectively, the same process will most likely drive us to extinction. None of us is about to get rid of our cars, cut our meat consumption or refrain from having children so that strangers don’t have to deal with a deteriorating environment at some unspecified time in the future. This is why we will never address climate change – because by the time its full impact is felt, and it becomes obvious that it is us rather than strangers that will have to deal with it, we will be too busy firefighting the collapse of our economies and a rapid fall in the energy and essential resources that our way of life depends upon.

It is in this light that we need to treat a recent report from Stanford University that claims that the world economy will be bolstered by taking urgent and radical steps to curb global warming. As Reuters reports:

“Stringent limits on global warming would bolster the world economy by averting tens of trillions of dollars in damage this century from heat waves, droughts and floods…

“The report, among the first to assess the economics of the 2015 Paris climate agreement, said the toughest temperature curbs would benefit 90 percent of the world’s population, especially in poor nations in Africa, Asia and Latin America.

“The world’s biggest economies – the United States, China and Japan – would also gain if the world achieves the toughest targets.”

Seductive as this sounds, it is based on the intellectual flaw of believing that the economy is a single, unified entity. Individual consumers, taxpayers, corporations and states will have to make the investment that is required to make those hypothetical savings. In case you hadn’t noticed, that would be the same consumers, taxpayers, corporations and states that are currently so cash-strapped that they can barely keep their heads above water. Notice, too, that the big winners from such an effort; “poor nations in Africa, Asia and Latin America,” are the least able to contribute toward those hypothetical savings.

On the other side of the calculation, that proposed “saving” of $30 trillion by the end of the century is not going to be shared equally among the planet’s (by then) perhaps 10 billion people. On our current trajectory, a handful of godzillionaires will pocket all of the gains while the rest of the global population will have to shoulder the cost… which is why we already see populations across the developed world rebelling against the cost of so-called renewable energy which is being disproportionately loaded onto ordinary people’s energy bills.

In practice, Florida points the way to how the world will deal with climate change. When the rising sea level (which will one day render much of Florida uninhabitable) resulted in “sunny day flooding” in the streets of Miami Beach, Florida’s Governor Rick Scott banned state employees from using the term “climate change” in official documents. We may laugh at that. But the truth is that even apparently environmentally aware European states like Denmark, Germany and Sweden are nowhere close to reducing their emissions to the level required to keep global temperatures below two degrees of warming. Talking about hypothetical savings tomorrow is not going to change that.

As you made it to the end…

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